Supplementary
Financial Information
Q1 2022
For the period ended: January 31, 2022
For further information, contact Scotiabank Investor Relations:
John McCartney - john.mccartney@scotiabank.com
Sophia Saeed - sophia.saeed@scotiabank.com
Mark Michalski - mark.michalski@scotiabank.com
Rene Lo - rene.lo@scotiabank.com
Supplementary Financial Information (SFI) | Page |
For the period ended: January 31, 2022 | |
Highlights | 1 |
Common Share and Other Information | 2 |
Consolidated Statement of Income | 3 |
Business Segment Performance | |
• Canadian Banking | 4 |
• International Banking | 5 |
• International Banking (Constant Dollar) | 6 |
• Global Wealth Management | 7 |
• Global Banking and Markets | 8 |
• Other | 9 |
Non-Interest Income | 10 |
Revenue from Trading-Related Activities and Assets Under Administration and Management | 11 |
Operating Expenses | 12 |
Consolidated Statement of Financial Position - Assets (Spot Balances) | 13 |
Consolidated Statement of Financial Position - Liabilities and Equity (Spot Balances) | 14 |
Average Balance Sheet | 15 |
Consolidated Statement of Changes in Equity | 16 |
Consolidated Statement of Changes in Equity (Continued) | 17 |
Credit-Related Information | |
• Loans and Acceptances by Type of Borrower | 18 |
• Impaired Loans by Business Segment | 19 |
• Changes in Gross Impaired Loans by Business Segment | 20 |
• Allowance for Credit Losses & Other Reserves | 21 |
• Impaired Loans by Type of Borrower | 22 |
• Provision for Credit Losses by Business Line | 23 |
• Provision for Credit Losses by Type of Borrower | 24 |
Cross-Border Exposures To Select Countries | 25 |
Financial Investments - Unrealized Gains (Losses) | 26 |
Regulatory Capital Highlights | 27 |
Appendix 1: Global Banking and Markets (Reported Including LatAm) | 28 |
Appendix 2: International Banking by Region | |
• Latin America | 29 |
• Caribbean & Central America (C&CA) and Asia | 30 |
Note: The supplementary financial information package contains comparative figures that have been reclassified in prior periods, where applicable, to conform with the current reporting period presentation.
Supplementary Financial Information
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Notes
This document is not audited and should be read in conjunction with our Q1 2022 Quarterly Report to Shareholders and 2021 Annual Report.
Non-GAAP Measures: The Bank uses a number of financial measures to assess its performance. Some of these measures are not calculated in accordance with Generally Accepted Accounting Principles (GAAP), which are based on International Financial Reporting Standards (IFRS), are not defined by GAAP and do not have standardized meanings that would ensure consistency and comparability among companies using these or similar measures. The Bank believes that certain non-GAAP measures are useful in assessing ongoing business performance and provide readers with a better understanding of how management assesses performance. These non-GAAP measures are used throughout this report and defined below.
Adjusting Items (1): Adjusted results exclude the following items: | |||||||||||
($ millions) | 2022 | 2021 | 2020 | Full Year | |||||||
Adjusting Items (Pre-Tax) | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | 2021 | 2020 |
Acquisition-Related Costs | |||||||||||
Integration Costs | - | - | - | - | - | 20 | 40 | 41 | 76 | - | 177 |
Canadian Banking | - | - | - | - | - | - | - | - | - | - | - |
International Banking | - | - | - | - | - | 16 | 34 | 33 | 71 | - | 154 |
Global Wealth Management | - | - | - | - | - | 4 | 6 | 8 | 5 | - | 23 |
Amortization of Intangibles(2) | 25 | 25 | 24 | 26 | 28 | 26 | 26 | 27 | 27 | 103 | 106 |
Canadian Banking | 6 | 6 | 5 | 5 | 6 | 6 | 5 | 6 | 5 | 22 | 22 |
International Banking | 10 | 10 | 11 | 11 | 13 | 11 | 12 | 12 | 12 | 45 | 47 |
Global Wealth Management | 9 | 9 | 8 | 10 | 9 | 9 | 9 | 9 | 10 | 36 | 37 |
Other | - | - | |||||||||
Allowance for Credit Losses - Additional Scenario | - | - | - | - | - | - | - | - | 155 | - | 155 |
Canadian Banking | - | - | - | - | - | - | - | - | 71 | - | 71 |
International Banking | - | - | - | - | - | - | - | - | 77 | - | 77 |
Global Wealth Management | - | - | - | - | - | - | - | - | 1 | - | 1 |
Global Banking and Markets | - | - | - | - | - | - | - | - | 6 | - | 6 |
Derivative Valuation Adjustment | - | - | - | - | - | - | - | - | 116 | - | 116 |
Global Banking and Markets | - | - | - | - | - | - | - | - | 102 | - | 102 |
Other | - | - | - | - | - | - | - | - | 14 | - | 14 |
Net (Gain)/Loss on Divestitures(3) | - | - | - | - | - | 8 | (44) | - | (262) | - | (298) |
Impairment Charge on Software Asset(3) | - | - | - | - | - | - | - | - | 44 | - | 44 |
Restructuring and oher provisions(3) | - | 188 | - | - | - | - | - | - | - | 188 | - |
Total (Pre-Tax) | 25 | 213 | 24 | 26 | 28 | 54 | 22 | 68 | 156 | 291 | 300 |
Adjusting Items (After-Tax, NCI) | |||||||||||
Acquisition-Related Costs | |||||||||||
Integration Costs | - | - | - | - | - | 15 | 24 | 20 | 41 | - | 100 |
Canadian Banking | - | - | - | - | - | - | - | - | - | - | - |
International Banking | - | - | - | - | - | 12 | 19 | 15 | 37 | - | 83 |
Global Wealth Management | - | - | - | - | - | 3 | 5 | 5 | 4 | - | 17 |
Amortization of Intangibles (2) | 18 | 18 | 18 | 19 | 20 | 19 | 18 | 20 | 20 | 75 | 77 |
Canadian Banking | 4 | 4 | 4 | 4 | 4 | 4 | 4 | 4 | 4 | 16 | 16 |
International Banking | 7 | 7 | 7 | 9 | 9 | 8 | 8 | 9 | 9 | 32 | 34 |
Global Wealth Management | 7 | 7 | 7 | 6 | 7 | 7 | 6 | 7 | 7 | 27 | 27 |
Other | - | - | |||||||||
Allowance for Credit Losses - Additional Scenario | - | - | - | - | - | - | - | - | 108 | - | 108 |
Canadian Banking | - | - | - | - | - | - | - | - | 52 | - | 52 |
International Banking | - | - | - | - | - | - | - | - | 51 | - | 51 |
Global Wealth Management | - | - | - | - | - | - | - | - | 1 | - | 1 |
Global Banking and Markets | - | - | - | - | - | - | - | - | 4 | - | 4 |
Derivative Valuation Adjustment | - | - | - | - | - | - | - | - | 85 | - | 85 |
Global Banking and Markets | - | - | - | - | - | - | - | - | 75 | - | 75 |
Other | - | - | - | - | - | - | - | - | 10 | - | 10 |
Net (Gain)/Loss on Divestitures(3) | - | - | - | - | - | 5 | (43) | - | (316) | - | (354) |
Impairment Charge on Software Asset(3) | - | - | - | - | - | - | - | - | 32 | - | 32 |
Restructuring and oher provisions(3) | - | 129 | - | - | - | - | - | - | - | 129 | - |
Total (After-Tax, NCI) | 18 | 147 | 18 | 19 | 20 | 39 | (1) | 40 | (30) | 204 | 48 |
- Refer to non-GAAP measures on page 4 of the Q1 2022 Quarterly Report to Shareholders, available on http://www.sedar.com.
- Excludes amortization of intangibles related to software.
- Recorded in Other operating segment.
Supplementary Financial Information
Notes (Cont'd)
For the three months ended | |||
($ millions) | January 31, 2022 | October 31, 2021 | January 31, 2021 |
Reported Results | |||
Net interest income | 4,344 | 4,217 | 4,351 |
Non-interest income | 3,705 | 3,470 | 3,721 |
Total revenue | 8,049 | 7,687 | 8,072 |
Provision for credit losses | 222 | 168 | 764 |
Non-interest expenses | 4,223 | 4,271 | 4,208 |
Income before taxes | 3,604 | 3,248 | 3,100 |
Income tax expense | 864 | 689 | 702 |
Net income | 2,740 | 2,559 | 2,398 |
Net income attributable to non-controlling interests in subsidiaries (NCI) | 88 | 70 | 90 |
Net income attributable to equity holders | 2,652 | 2,489 | 2,308 |
Preferred shareholders and other equity instrument holders | 44 | 78 | 43 |
Net income attributable to common shareholders | 2,608 | 2,411 | 2,265 |
Diluted earnings per share (in dollars) | 2.14 | 1.97 | 1.86 |
Adjustments | |||
Amortization of Acquisition-related intangible assets, excluding software (1) | 25 | 25 | 28 |
Restructuring and other provisions (1) | - | 188 | - |
Adjustments (Pre-tax) | 25 | 213 | 28 |
Income tax expense/(benefit) | (7) | (56) | (8) |
Adjustments (After-tax) | 18 | 157 | 20 |
Adjustment attributable to NCI | - | (10) | - |
Adjustments (After-tax and NCI) | 18 | 147 | 20 |
Adjusted Results | |||
Net interest income | 4,344 | 4,217 | 4,351 |
Non-interest income | 3,705 | 3,470 | 3,721 |
Total revenue | 8,049 | 7,687 | 8,072 |
Provision for credit losses | 222 | 168 | 764 |
Non-interest expenses | 4,198 | 4,058 | 4,180 |
Income before taxes | 3,629 | 3,461 | 3,128 |
Income tax expense | 871 | 745 | 710 |
Net income | 2,758 | 2,716 | 2,418 |
Net income attributable to NCI | 88 | 80 | 90 |
Net income attributable to equity holders | 2,670 | 2,636 | 2,328 |
Preferred shareholders and other equity instrument holders | 44 | 78 | 43 |
Business Segment Performance: Global Wealth Management | 2,626 | 2,558 | 2,285 |
Adjusted diluted earnings per share | |||
Adjusted net income attributable to common shareholders | 2,626 | 2,558 | 2,285 |
Dilutive impact of share-based payment options and others | 24 | 7 | 42 |
Adjusted net income attributable to common shareholders (diluted) | 2,650 | 2,565 | 2,327 |
Weighted average number of basic common shares outstanding ($ millions) | 1,211 | 1,215 | 1,212 |
Dilutive impact of share-based payment options and others ($ millions) | 19 | 9 | 25 |
Adjusted weighted average number of dilutive common shares outstanding ($ millions) | 1,230 | 1,224 | 1,237 |
Adjusted diluted earnings per share (in dollars) (2) | 2.15 | 2.10 | 1.88 |
Impact of adjustments on diluted earnings per share (in dollars) | 0.01 | 0.13 | 0.02 |
(1) Recorded in non-interest expenses.
(2) Earnings per share calculations are based on full dollar and share amounts.
Supplementary Financial Information
Enhanced Disclosure Task Force (EDTF) Recommendations
The Enhanced Disclosure Task Force (EDTF) of the Financial Stability Board published its report, "Enhancing the Risk Disclosure of Banks" on October 29, 2012. The report sets forth recommendations around improving risk disclosures and identifies existing leading practice risk disclosures. The Bank provided these disclosures in its 2014 Annual report and continues its efforts to provide further disclosures with the objective of enhancing and aligning with evolving industry practices associated with the 32 recommendations in the EDTF report. Below is the index of all these recommendations to facilitate easy reference in the Bank's public disclosure documents available on www.scotiabank.com/investor relations.
January 31, 2022 Reference Table for EDTF | ||||||||
Recommendation | Q1/22 | 2021 Annual Report | ||||||
Type of Risk | Number | Disclosure | Quarterly Report | Supplementary Regulatory | MD&A | Financial Statements | ||
Capital Disclosures | ||||||||
General | 1 | The index of risks to which the business is exposed. | 14 | |||||
2 | The Bank's risk to terminology, measures and key parameters. | 82-85 | ||||||
3 | Top and emerging risks, and the changes during the reporting period. | 87-88,92-98 | ||||||
4 | Discussion on the regulatory development and plans to meet new regulatory ratios. | 42-45 | 61-64,106-109,122-124 | |||||
Risk Governance, | 5 | The Bank's Risk Governance structure. | 79-81 | |||||
Risk Management and | 6 | Description of risk culture and procedures applied to support the culture. | 82-85 | |||||
Business Model | ||||||||
7 | Description of key risks from the Bank's business model. | 86 | ||||||
8 | Stress testing use within the Bank's risk governance and capital management. | 82-83 | ||||||
Capital Adequacy and | 9 | Pillar 1 capital requirements, and the impact for global systemically important banks. | 42-43 | 3 | 61-64 | 216 | ||
Risk-Weighted Assets | 10 | a) Regulatory capital components. | 42,70 | 18-21 | 65 | |||
b) Reconciliation of the accounting balance sheet to the regulatory balance sheet. | 15-16 | |||||||
11 | Flow statement of the movements in regulatory capital since the previous reporting period, | 70 | 66-67 | |||||
including changes in common equity tier 1, additional tier 1 and tier 2 capital. | 42 | |||||||
12 | Discussion of targeted level of capital, and the plans on how to establish this. | 61-64 | ||||||
13 | Analysis of risk-weighted assets by risk type, business, and market risk RWAs. | 5,34,36-47,55-57,61,73,79 | 69-73, 86, 131 | 185, 240 | ||||
14 | Analysis of the capital requirements for each Basel asset class. | 13-14,34-48,54-57,61,66-69 | 69-73 | 185, 233-240 | ||||
15 | Tabulate credit risk in the Banking Book. | 74 | 13-14,34-48,66-69 | 69-73 | 235 | |||
16 | Flow statements reconciling the movements in risk-weighted assets for each risk-weighted asset type. | 49,60,72 | 69-73 | |||||
17 | Discussion of Basel III Back-testing requirement including credit risk model performance and validation. | 77 | 70-72 | |||||
Liquidity Funding | 18 | Analysis of the Bank's liquid assets. | 33-36 | 104-109 | ||||
19 | Encumbered and unencumbered assets analyzed by balance sheet category. | 33-36 | 106 | |||||
20 | Consolidated total assets, liabilities and off-balance sheet commitments analyzed by remaining contractual maturity at the | 40-41 | 110-112 | |||||
balance sheet date. | ||||||||
21 | Analysis of the Bank's sources of funding and a description of the Bank's funding strategy. | 38-39 | 109-110 | |||||
Market Risk | 22 | Linkage of market risk measures for trading and non-trading portfolios and the balance sheet. | 32-33 | 103 | ||||
23 | Discussion of significant trading and non-trading market risk factors. | 75 | 99-104 | 239-240 | ||||
24 | Discussion of changes in period on period VaR results as well as VaR assumptions, limitations, backtesting and validation. | 32, 75 | 99-104 | 239-240 | ||||
25 | Other risk management techniques e.g. stress tests, stressed VaR, tail risk and market liquidity horizon. | 99-104 | 240 | |||||
Credit Risk | 26 | Analysis of the aggregate credit risk exposures, including details of both personal and wholesale lending. | 5, 34, 36-47,55-57 | 92-98,125-131 | 194-196,236-238 | |||
27 | Discussion of the policies for identifying impaired loans, defining impairments and renegotiated loans, and explaining loan | 163-165, 196 | ||||||
forbearance policies. | ||||||||
28 | Reconciliations of the opening and closing balances of impaired loans and impairment allowances during the year. | 60 | 31, 32 | 94, 125-126,128-129 | 196 | |||
29 | Analysis of counterparty credit risk that arises from derivative transactions. | 44, 73-74 | 78 | 90-91 | 183-186 | |||
30 | Discussion of credit risk mitigation, including collateral held for all sources of credit risk. | 73-74 | 90-91, 95 | |||||
Other Risks | 31 | Quantified measures of the management of operational risk. | 75 | 73, 113 | ||||
32 | Discussion of publicly known risk items. | 44 | 78 | |||||
Supplementary Financial Information
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The Bank of Nova Scotia published this content on 01 March 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 March 2022 11:17:57 UTC.